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Ericsson Q4 operating profit beats forecasts as China recovers

Swedish mobile telecom equipment maker Ericsson said sales in China recovered while business in North America remained stable as it posted fourth-quarter operating profit above market expectations boosted by patent fees Wednesday.

The fourth quarter caps a second year of falling like-for-like sales at Ericsson. In 2015, group sales dropped 5 percent on a comparable basis after declining 2 percent in 2014.

“In North America, the mobile broadband investments remained stable, with additional hardware sales in the quarter. 4G deployments in Mainland China recovered after a weak third quarter,” Ericsson said in a statement.

Operating profit was 11.0 billion Swedish crowns ($1.29 billion) compared to 6.3 billion in the year-ago quarter and above a mean forecast of 10.6 billion crowns in a Reuters poll of analysts.

Sales at Ericsson, the world number one mobile network equipment maker, were 73.6 billion crowns, below a forecast of 74.1 billion. The gross margin was 36.3 percent against a mean forecast of 37.3 percent.

Sales and profits were lifted by a one-off payment from Apple Inc after the firms settled litigation last month and signed a patent license agreement.

No financial details were disclosed. For the full year, Ericsson had revenues from intellectual property rights of 14.4 billion versus a forecast from the firm of 13-14 billion last month.

Ericsson proposed a dividend of 3.70 crowns per share, slightly above expectations of 3.60 crowns per share and said it was on track to reach its target of 9 billion crowns in annual savings by 2017.

Source: Reuters

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